The Timeliness of Another Ron Paul Presidential Bid

At 7:00 a.m. EST, Dr. Ron Paul announced his U.S. presidential candidacy. When asked why he’s running yet again, Dr. Paul answered, “Time has come around to the point where the people are agreeing with much of what I’ve been saying for 30 years. So, I think the time is right.”

That may be true. More people are asking about the size and scope of the federal government. The Chairman of the Federal Reserve is giving press conferences and being asked tough questions. Government deficits are getting plenty of attention.

But do that many people really agree with Dr. Paul on the causes and solutions to those deficits? In his May 11 U.S. News article “5 Reasons Taxes Are Going To Rise”, Rick Newman writes:

The United States has been spending well beyond its means for a decade, borrowing to make up the difference and racking up debt that now totals more than $14 trillion—about the size of the entire U.S. economy. This year, the government is on course to spend about $3.8 trillion, while taking in just $2.2 trillion, mostly through taxes. So it’s borrowing to finance an astonishing 42 percent of its spending. For anybody who thinks it’s easy to cut 42 percent of all federal spending (and still get reelected), here’s how that spending breaks down:

Social Security and Medicare, the government’s two most popular programs, account for 39 percent of all spending.

Defense accounts for 20 percent.

Medicaid, which helps keep our embarrassingly high poverty rate from being even higher, accounts for 7.5 percent.

Interest on the debt, which must be paid unless Washington is willing to default and cause a global depression, is 5.4 percent of federal spending.

Everything else — which includes running the government, keeping the federal courts and foreign embassies open, managing the air-traffic control system, building and maintaining interstate highways, offering aid to victims of floods, hurricanes, and tornadoes, and thousands of other functions no other entity can really handle—accounts for the other 28 percent of spending.

Some of that can surely be cut without ruining the republic. But not 42 percent of it.

Not 42 percent? Just under 40 percent alone comes from unconstitutional transfers of wealth to those over age 65. (The money withheld for Social Security and Medicare are not and have never been “locked away”, but instead almost immediately transferred to those eligible to receive it.) Another 7.5 percent comes from transfer payments to the poorest among us.

Another 20% is from what is euphemistically called “defense” but which is, as Dr. Paul repeatedly points out, more realistically an overextended military engaged in pre-emptive policing in foreign lands and outright offense. That $760 billion per annum on “defense” could probably be cut to far less than 10% if the military’s activities were truly scaled back to simple defense.

Mr. Newman — and no doubt several hundred million U.S. citizens — also believes that highways, air control and “thousands of other functions” can only be handled by a centralized federal authority. Right now we don’t need to argue about how markets (and market anarchism) could provide roads, education and justice. But we do need to realize that the “two most popular” social programs are almost entirely responsible for the part of the bill that the government can’t pay.

It seems that government can easily afford to pay for the basic infrastructure and justice system with the tax money it collects (whether it provides these things efficiently is a worthy consideration for another time). These are the things that everyone but anarcho-capitalists can agree on: the physical infrastructure of roads, the administration of justice and the defense of the national borders.

It’s the Other Stuff, the wars of aggression and most tellingly the welfare programs that are putting the government deeper and deeper into debt every year.

Balancing budgets really isn’t that tricky. You spend less than you take in until your debts are paid. It’s the realization that you can’t have it all where most people get caught up. You can’t buy more than you can afford, at least not forever. At some point your creditors stop extending you a line and the repo men start to appear.

Americans seem to want to give nothing up…or to delude themselves into thinking unworkable compromises will actually work. Maybe just slightly higher taxes with slightly reduced benefits. Maybe much higher taxes with the same benefits. A vanishingly small percentage of the populace — mostly the kind who would welcome a Ron Paul Presidency — is thinking of truly drastic reduction or even elimination of entitlement spending and a eventually a lower tax burden.

Government can try to raise taxes, but is it really a good idea to take more private funds to keep up welfare transfer payments? It’s hard for entrepreneurs to invest in new business or for businesspeople to grow existing businesses when their profits are increasingly appropriated to pay for strangers’ retirements and their medical care…or to send drones to bomb another village in a foreign desert for that matter. The more taxes are raised, the more the private sector shrinks; there is less wealth to tax; less of an economy to provide jobs and therefore more of a perceived need for government to step in and “help”. This vicious cycle has been accelerating for nearly a century (starting with the creation of the Federal Reserve, then continuing with two world wars and the explosion of social programs under Lyndon Johnson).

But growing numbers of people are catching on. That’s why Ron Paul made his announcement to run yet again. The ugly truth is that welfare (Social Security, Medicare and Medicaid) and warfare are doing what they always do: bankrupting a nation. The only way to arrest the problem is to make people realize that the government has made more promises than it can afford to pay for with the money it takes in…and that many (all?) of those promises should never have been made in the first place.

Dr. Paul may very well not win the presidency. He may not even get the Republican nomination, but he’s already done the vital work of educating the public and initiating a change in public opinion. He’s the herald of the proverbial Idea Whose Time Has Come. Like he said in this morning’s interview, he’s already won.

You May Also Be Interested In:

Who would take a job for $9 an hour if you’re paid $10 not to work?… The hidden costs of artificially raising the costs of labor…

About Gary Gibson:

Gary Gibson is the managing editor for Whiskey and Gunpowder. He joins the Whiskey staff as a long-time fan and reader of both Whiskey and Gunpowder and the Daily Reckoning. A graduate of Fordham University, Gary now spends his days reading about and writing on limited government, sound money, personal responsibility and resource investing.